Google Eyes Yahoo Display Ad Mantle with DoubleClick Ad Exchange

Google finally launched its DoubleClick Ad Exchange, a real-time bidding platform designed to help the search engine make great headway in online display advertising versus market leader Yahoo. Google, which fought hard to get antitrust approval before buying DoubleClick for $3.1 billion in March 2008, has major online publishers in mind for the Exchange, while more than 40 ad networks across North America and Europe will connect Websites with the advertisers through DoubleClick.

Google Sept. 18 went after the market for online display
advertising with full force, opening the new DoubleClick Ad Exchange to tackle market
leader Yahoo.
DoubleClick Ad Exchange, which has been
rebuilt with Google's technology and is backed by Google's infrastructure, is a
marketplace where prices are set in a real-time auction for display ads, or
graphical ads on Websites that catch people's attention.

Real-time bidding lets ad networks use their own
technology to bid on an impression-by-impression basis. The Exchange generates online publishers the biggest return
for every impression by allocating ads to the highest-paying sales channel on the fly.

Google, which fought hard to get antitrust approval
before buying DoubleClick for $3.1 billion in March 2008, has major online publishers
in mind to help it sell ads via the Exchange, including newspapers, large portals, and entertainment
and branded sites. Moreover, ad real estate on Google's third-party AdSense
publisher sites is being made available through the new Ad Exchange.
On the buy side, Google said more than 40 ad
networks across North America and Europe will connect Websites with the
advertisers through the Exchange. Also, AdWords advertisers will be able to run
ads on sites in the Ad Exchange, using their existing AdWords interface.
Display ads come in image, interactive or video form,
often appearing on Web pages to the right of content Web surfers have searched
for online. The ads show products and services that are usually relevant to the
content with which they are displayed.
These ads are geared to help advertisers boost sales. Websites and
online publishers host these ads to get a cut of the ad revenue to
pad their own coffers. Companies such as Yahoo, Google, Microsoft and
AOL serve
the ads with their platforms, taking an undisclosed cut of the ad
revenues. Neal
Mohan, vice president of product management at Google, explained
in a blog post the challenge Google is trying to address with the Ad Exchange:

"With a multitude of display ad formats, and thousands of Websites,
it often takes thousands of hours for advertisers to plan and manage
their display ad campaigns. With this complexity, lots of advertisers
today
just don't bother, or don't invest as much as they would like. On the
other
side of the equation, some publishers are left with up to 80 percent of
their ad space
unsold. It's like airlines flying with their planes mostly empty. And
for the
ad space that they do sell, publishers also have to deal with the
complexity of
managing thousands of advertisers and campaigns... Better
technology can help make display advertising work better for all
involved. We're focused on growing the display
advertising pie for everyone. The DoubleClick Ad Exchange is a major
part of
that goal."

Claims of trying to make the pie larger for everyone
sound very altruistic, but Google had eyed Yahoo's 20 percent-plus market share
in display ads with envy for several years. Google has been the king of
contextual search ads for a decade, but it has failed to figure out the display
ad puzzle.
comScore said the search giant
tallied (WSJ paywall) only 1.3 percent of display ad views in March 2009.
For its part, Yahoo
said it welcomes Google's competition, but internally it can only be viewing
Google's Ad Exchange with wariness. Next to its massive visitor and user base,
display advertising ranks as Yahoo's most prized asset.
Read more on TechMeme here,
though for one superb report, see The New York Times.